WTI looking for a rebound into $82.50 after getting knocked lower by US CPI inflation stumble

• WTI prices slumped into a new low for the day following the broad-market risk-off flows after US CPI beat forecasts.
• Fears of inflation-fueled Fed rate hikes sent investors scrambling, but Crude Oil traders are determined to recover the day.
• Despite pinging a new low for the week, Crude Oil continues to see support from geopolitical tensions and supply concerns.

West Texas Intermediary (WTI) Crude Oil barrel prices saw an plunge from the day’s highs, knocking into a new low for the week at $81.45 before seeing a steady recovery, and barely bids are now testing into Thursday’s midpoint.

A surprise build-up of US crude oil reserves helped knock back oil bids in the early Thursday trading session, with US crude inventories rising 10.2 million barrels, adding to last week’s reading to raise US crude supplies to 424.2 million barrels. 

The crude reserve printing soundly beat market forecasters, with the median market estimate calling for a scant 500K barrel uptick.

The unexpected crude buildup was propped up by lower-than-expected refinery utilization rates and higher net imports of foreign crude.

Despite inflation fears following the US Consumer Price Index (CPI) inflation market beater that saw broad-market risk appetite take a sharp turn, Crude Oil remains well-bid after the US announced a fresh round of sanctions against Russia after Russian oil exporters violated a $60-per-barrel trade cap on Russian domestic oil sales.

The price cap was started in December of 2002 as a repercussion for the invasion of Ukraine, locking US trade entities from accessing Russian oil markets.

Oil market sentiment remains pinned in the high end after last weekend’s Gaza Strip conflict escalation, and investors are concerned that geopolitical tensions could spill over into nearby Iran and Saudi Arabia as Israel and Palestinian Hamas rapidly escalate their long-standing war over the Gaza Strip.

WTI Technical Outlook

Crude Oil’s Thursday decline sees WTI prices back into near-term lows, trading just north of the $82.00/bbl handle.

Technical support for US Crude Oil from the 200-day Simple Moving Average (SMA) near $78.00, but the 50-day SMA is parked just above current price action near $84.84, keeping intraday action constrained as energy investors look to spark a fresh lift in crude barrels.

WTI Daily Chart

WTI Technical Levels